Textile, pharma, auto stocks end lower as US announces 25 pc tariff plus penalty on India

New Delhi, Jul 31 (PTI) Textile, pharma, auto and IT stocks ended lower on Thursday after US President Donald Trump announced the imposition of a 25 per cent tariff on all goods coming from India starting August 1, plus an unspecified penalty for buying Russian crude oil and military equipment.

Among textile-related stocks, Pearl Global Industries tumbled 7.32 per cent, Gokaldas Exports dropped 4.37 per cent, Arvind Ltd fell by 4.33 per cent, Vardhman Textiles declined 4.23 per cent, Welspun Living fell by 3.92 per cent, K P R Mill skidded 3.12 per cent and Alok Industries dipped 2.51 per cent on the BSE.

From pharma stocks, Jubilant Pharmova dropped 3.65 per cent, Ipca Lab slipped 3.14 per cent, Lupin (2.98 per cent), Sun Pharma (1.69 per cent), Dr Reddys Lab (1.61 per cent), RPG Life Sciences (0.83 per cent) and Cipla (0.58 per cent).

Shares of Force Motors, Bajaj Auto, Ashok Leyland, Tata Motors and Mahindra & Mahindra also ended lower.

The BSE auto index dipped 0.35 per cent to 52,901.32.

From the IT pack, shares of Hexaware Technologies went down by 1.26 per cent, Wipro dipped 0.74 per cent, Infosys (0.69 per cent), HCL Technologies (0.64 per cent) and Tata Consultancy Services (0.53 per cent).

Tracking a weak trend in these stocks, the BSE IT index declined 0.63 per cent to 34,808.58.

Nitin Bhatt, Technology Sector Leader at EY India, said, "While the Indian IT services sector isn't directly hit by the newly announced 25 per cent US tariffs, the ripple effects could be substantial.

"Rising input costs may prompt US companies to scale back discretionary tech spending. Simultaneously, growing unease around workforce mobility and evolving digital taxation frameworks could redefine how cross-border services are priced and delivered." Halting its two-day rally, the 30-share BSE index declined 296.28 points or 0.36 per cent to settle at 81,185.58 after recovering some lost ground during the afternoon trade. The 50-share NSE Nifty dropped 86.70 points or 0.35 per cent to 24,768.35.

The announcement is being seen as a pressure tactic to get New Delhi to agree to demands made by the US, which has, in recent days, got favourable trade deals with major partners like Japan, the UK and the European Union.

The penalty was announced as India has made large purchases of oil and military equipment from Russia. India is the first country to face a penalty for Russian imports.

Utsav Verma, Head of Research - Institutional Equities at Choice Broking, said investors will reassess their strategies with a mix of caution and optimism.

Sectors like textiles, pharmaceuticals, and automotive components are likely to be the most impacted and may see reduced investor interest in the short term.

However, recent progress in trade negotiations suggests a constructive path forward, and "we believe that the trade deal will eventually follow, provided both nations show the necessary political will", he said, adding that many investors expect the tariff rate to eventually settle around 15 per cent.

"While a 25 per cent tariff imposed by the US on Indian exports certainly disrupts vital sectors and presents immediate challenges for India's economy, it is improbable that it will significantly alter the country's long-term growth path.

"India's growth narrative is supported by solid fundamentals such as a growing domestic market, vibrant entrepreneurial spirit, and increasing international partnerships," Rajesh Palviya, SVP - Research at Axis Securities, said. PTI SUM SUM SHW